BPL mobile: Is UPA's poll dole really a telecom sweetener?

Will the proposed Har Hath Mein Phone project of the UPA ring in an additional revenue stream for Indian telecom companies?

It could, considering the government is also giving 200 minutes of local calls free.

According to a report in the Times of India, the government may take the competitive bidding route to subsidise service charge.

According to an Indian Express report, as many as 6 million households are likely to come under the scheme’s ambit. This means roughly 12 million users for the telecom companies.

Therefore, there are chances the companies may find an additional stream of revenue through the scheme.

[caption id=“attachment_410417” align=“alignleft” width=“380”]  Will the BPL scheme help telcos? Reuters[/caption]

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The telecom sector in India has been reeling under uncertainties ever since the scam in the 2G spectrum allocation in 2008 came to light.

Companies have also been under pressure due to rising competition that has resulted in significant undercutting of tariffs.

Research reports from brokerages have suggested that smaller players in the industry may find the going tough once the 2G spectrum auctions take place in early November, because of the higher licence fee.

If the government, with an eye on polls, rolls out the scheme, it may turn out to be a relief for the companies.

Earlier, there have been instances when companies benefited from such election promises. In Tamil Nadu, the DMK had given away around 1 lakh colour television sets for free to the poor after it won the elections in 2006.

The ToI report said the government is planning to sell the scheme as a major empowerment initiative. It will also provide the government a chance to open a direct channel of communication with the masses.

India had 951.34 million telephone subscribers as of 31 March, according to data from the Telecom Regulatory Authority of India. Of this 34.77 percent were rural subscribers.

The number of rural wireless subscribers stood at 323.27 million. In the wireless segment, the teledensity stood at 38.33 percent.